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Level 1

Upfront Deposits messing up Sales Reports

Hi,

 

I run a catering company in which we receive upfront deposits for events to be catered in the future.  I have read lots of posts of how to properly enter these into quick books.  Yet I am having trouble making sense of my "sales by product" and "sales by customer" reports when I have an upfront deposit received in one fiscal year and the actual event/invoice taking place in the following year. 

My method is...

- Set up a liability account

- Created a service item to link to this account

- Physically Deposit the "upfront deposit" to my bank

- Create a Sales receipt in QB in which I choose the "service item" that matches to my liability account

- Then match the upfront deposited check as seen in my "for review" section of banking to my sales receipt.

- Once the final job is completed I create an invoice in QB 

     - I enter the total job cost on one line with a "service" that links to my income account

     - the last line I enter the upfront deposit amount with a -1 Qty and the "service" that links to my liability account

- From here it shows the remaining balance owed, which I then match with the "remaining balance" check I deposited to my bank and see in the  "for review" part of banking. 

 

The problem I am having is say receiving an upfront deposit in 2018 but not having the final event and income realized till 2019.  

 

My question is when I now run "sales by customer" or "sales by product" for 2018 I am seeing these "upfront deposits" as part of these sales.  Should they not linked to my final invoice and only viewable for 2019?

 

Yet when I run a PnL for each year it seems that the income is properly sorted and I only the "upfront deposits" being recognized in the year of the final invoice.

 

Sorry for the long post and misuse of accounting terminology, but I wanted to see if my workflow was proper and if its possible to get my sales reports to reflect my actual realized income in each year respectively.

 

Thank you!

Solved
Best answer January 05, 2020

Best Answers
Highlighted
Community Champion

Upfront Deposits messing up Sales Reports

"Sales By..." is in simple terms a total of transactions regardless of type. Therefore you are seeing a total of transactions by customer that includes the upfront deposits as well as posted actual sales.

 

But your P/L is correct and that is what matters.

View solution in original post

2 Comments 2
Highlighted
Community Champion

Upfront Deposits messing up Sales Reports

"Sales By..." is in simple terms a total of transactions regardless of type. Therefore you are seeing a total of transactions by customer that includes the upfront deposits as well as posted actual sales.

 

But your P/L is correct and that is what matters.

View solution in original post

Highlighted
Level 1

Upfront Deposits messing up Sales Reports

Great!  Thank you John-Pero!  I just wanted to make sure my method was sound and appreciate you clarifying the "Sales by".

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